U.S., Japan still mulling regional trade pact: Obama

U.S. President Barack Obama (R) listens to Japanese Prime Minister Yoshihiko Noda duing a joint news conference in the East Room of the White House in Washington, April 30, 2012. REUTERS/Yuri Gripas

WASHINGTON (Reuters) - President Barack Obama voiced support on Monday for Japan joining talks with the United States and eight other countries on a free trade agreement in the fast-growing Asia-Pacific region, but said no final decision had been made.

“We instructed our teams to continue our consultation regarding Japan’s interest in joining the Trans-Pacific Partnership (TPP), which would benefit both our economies and the region,” Obama said at a joint news conference with Japanese Prime Minister Yoshihiko Noda.

The United States hopes to finish talks with Australia, New Zealand, Peru, Chile, Singapore, Malaysia, Vietnam and Brunei on the TPP pact by the end of the year.

The countries say they are aiming for a “21st Century” agreement that goes further than previous trade pacts in tearing down barriers to trade and raising international standards in areas like labor and the environment.

In November, Japan, Mexico and Canada expressed interest in joining the talks. Over the past five months, the current members have been discussing the feasibility of bringing the three countries into the negotiations without lowering ambitions for the agreement or allowing the talks to drag on.

Canadian Trade Minister Ed Fast, in Australia to drum up support for his country’s application, said it was unclear when a decision would be made or whether all three applications would be dealt with together.

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“Each of our economies - Japan, Mexico, Canada - have unique circumstances, unique challenges, unique trade barriers that the current partners want to have addressed,” Fast told Reuters in an interview at the Canadian consulate in Sydney.

“We believe it is to our benefit that our application be considered on its own merits rather than as a group.”

Canada has faced opposition to its supply management system for agricultural producers, which has been criticized as a form of protectionism. Fast said Canada had told the partners all issues “without exception” would be on the negotiating table but there was no plan to dismantle the supply management approach.

Japan's Prime Minister Yoshihiko Noda (L) and Secretary of State Hillary Clinton (2nd L) walk together to a reception at the National Geographic Society in Washington, April 30, 2012. REUTERS/Jonathan Ernst

“We’ve made a commitment to our Canadian farmers ... and we have no intention of breaking our word to that industry.”

CONGRESS WARY ON JAPAN

Many members of the U.S. Congress are wary about allowing Japan, the world’s third largest economy, into the negotiations.

They have demanded stronger evidence that Tokyo is ready to open its market to more U.S. exports in sectors ranging from agriculture to autos.

The next time the top trade officials from the TPP countries will be together is in early June in Kazan, Russia, at the APEC (Asia Pacific Economic Cooperation) trade ministers meeting.

APEC leaders are due to meet in early September in Vladivostok, Russia. That comes right after the U.S. Democratic Party’s convention to renominate Obama for president, raising questions about whether he will attend the APEC meeting.

Noda, who faces opposition at home to his push to join the TPP talks, said it was important the United States and Japan work together on creating rules for the region in areas ranging from anti-terrorism and intellectual property rights protection to the oceans and outer space.

“In the economic area, we shall deepen bilateral economic ties and fortify the growth and prosperity of the two countries through the promotion of economic integration in the Asia-Pacific region,” Noda said.

“Our countries will work on regional trade and investment rules-making with a view to building FTAAP, or the Free Trade Area of the Asian-Pacific,” he said, referring to a longer-term goal of crafting a free trade pact among all 21 APEC members.

That “will advance consultations with a view to participating in the Trans-Pacific Partnership negotiations,” Noda said.

Additional reporting by Alister Bull in WASHINGTON and Lincoln Feast in SYDNEY; Editing by Vicki Allen and Paul Tait